The Madison Group (TMG), a leading source of Triple Net Lease financing
nationwide, arranged the $1,450,000
purchase loan of a Mister Car Wash in Tucson, AZ. The borrower’s goals were to purchase
this triple-net asset with a long term self-amortizing loan. TMG secured the financing with a life
insurance company on a 20-year fully amortizing fixed
rate of 4.67%.
The property
is a Mister Car Wash with a 20-year absolute triple-net corporate lease and approximate
2 per cent annual rent escalations. Mister Car Wash is the country’s largest operator
of conveyor car washes. The car wash is at the intersection of Midvale Park
Road and Irvington Road, easily accessible from Interstate 19. The Irvington
Road exit from the freeway leads directly to the car wash. Being in close proximity to a regional
shopping center, the site benefits from high traffic counts of more than 44,000
vehicles per day. Mister Car Wash currently operates 229 car washes and 34 lube
centers across the United States. With 15 locations and their corporate
headquarters in Tucson, they have the strongest presence of any operator in the
city.
The borrower
sold several properties and was looking for an asset that required little
management and offered long term security. He chose this NNN asset as his replacement
property. “Car washes are a more difficult asset to
finance,” said Angela Kesselman, associate director of financing for TMG, “but
with the strength of the tenant and the large down payment, we were able to get
a life insurance company to finance the purchase.”
The borrower
was able to purchase the property with a 20-year loan and a low 20-year
interest rate. The loan will be paid in
full at the end of the lease and should receive regular lease payments as
income for the next 20 years.
“The loan we secured for our client
will ensure that he has long-term income and no debt at the end of the lease,
which was a big selling point for him,” said Kesselman.